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  • 1. Case Study Restructuring for Growth and Excellence As part of its long-term strategy for excellence, Insurance and Financial Management (IFM), MassMutual Life Insurance Company’s largest strategic business unit (SBU), examined its position in the financial industry with the objective of strengthening its general agency distribution system. The comprehensive strategic planning process, fa- cilitated by outside consultants, examined the company’s core competencies, product/market matrix, basis of competing, performance measures, mission, values, and operating principles. As a result, IFM senior management decided to implement a broad series of changes in its distribution system, involving major business restructuring, technology, and cultural change. This case describes how the implementation of one of these projects was managed. The MassMutual IFM sales distribution system is comprised of 90 sales offices, called agencies. The managers, called General Agents, who head up these sales offices (agencies), are essentially sole proprietors under contract with the MassMutual. Thus they enjoy a fair degree of autonomy in their operations. In the past, the company had taken a fairly hands-off approach to managing these sales agencies. While this approach encouraged individual en- treprenettrship, it essentially left each sales agency on its own reinventing the wheel. In an increasingly complex financial services indttstry, this approach limited the ability of these sales agencies to grow and achieve higher levels of success. The restructuring program was designed to provide a more standardized ‘MassMutual’ way to doing business that provided a better foundation for agency growth and success while allowing the home office to focus resources on improving its operations in key support areas. Described here are the steps the company took to create conditions conducive to change and implement their ‘Agency Models for Success’ project. Models fr success: shared oisious/,,iuit:ial decisions. The ‘Agency Models for Success’ are based on a shared vision for excellence and growth of the MassMutual sales agency distribution system. Based on the best practices of successful general agencies throughout the insurance industry, 10 models, addressing key areas of agency operations, were shaped through a two-year strategic review process involving agency and home office staff working together in the spirit of interdependence and partnership. The models focused on three strategic areas of agency operations: getting, keeping, and building field force; getting, keeping, and building clients; and agency management. The resulting models were: Business enterprise Frontline management Recruiting and selection Agency marketing Building and retaining agents Technology Strategic business planning New business Investment services The models addressed 5 basic questions. What is recommended? Why is it important to me? How will it achieve better results than the way in which I am now doing it? How do I implement it? And what resources are available to help me implement it? In addition, the program defined a vision for the sales agency of the future. Three different size agencies were de- tailed, looking at factors such as organizational structure, management and support staff, services, operating costs, budgeting, and marketing, among others. This shared vision was communicated through various events and media, including major sales conferences, special brochures, manuals, letters, executive summaries, and company newspapers, to name a few. Various strategies wereused to reinforce the vision constantly and consistently. The consulting process—a mirror. The models incorporated significant management, operational, and cultural ~hanges for both the field and the home office. Implementa~on of the models required first obtaining the buy-in of the ~eneral Agent (sales agency manager) to the program. The tome office then worked with each sales agency in
  • 2. analyzrig current operations, identifying high leverage opportuities for growth, establishing goals, developing action lans, executing these programs, and monitoring results. Implementing this program required working closely ith representatives of the General Agents Association to cree a five-step consulting process. After piloting the program four sales agencies, the company organized four Agency odel Consulting Teams. Each team was headed by a regional cond vice president plus three other knowledgeable consulits. One member of that team was a technology specialist. General Agents interested in using the best practices to w their agencies to new levels of success could request a it from an Agency Models Consulting Team. The four member teams spent two and a half days with the General Agent and his or her staff to help assess how the sales agency was doing and how current operations compared with the ‘Agency Models for Success’. The consultants conduct a day or more of intense interviewing with a minimum of 16 people in each sales agency. These include both agency staff and agents. The results are compiled and ‘mirrored’ back to the agency staff as a snapshot of reality as seen by the consulting team. Impacting the future. The ‘mirroring’ process, because it is non-judgmental, is a powerful techniqtie in helping the agency management staff identify opportunities for improving their performance. Following the ‘mirror’ presentation, the consultants work with the management team to identify high leverage opportunities for growth and what the agency wants to do about them. The consulting team works with the agency management team to help clarify needed actions to achieve the objectives they set. The outcome of this session is a ‘win/win’ partnership agreement with formal action plans and a commitment to work together to achieve results. Some of the critical success factors of this approach are: vision and strategic alignment; managing the process; business/technical partnership; train and supporting innovative procedures; and sustaining long-term commitment. ing Vision and strategic ahg;rnlL’nt. In order to support the changes being implemented in the distribution system, the company needed to realign internal operations. Five teams were assigned to formulate plans for reengineering IFM home office operations in the following key areas: marketing, building and retaining field force, recruiting and selection, agency management, and client building. The six-month effort was guided by outside consultants. Each team included a mix of business and systems people, headed by a vice president as team captain. The entire project was managed by a senior vice president with oversight provided by a senior management steering committee. The reengineering recommendations of the five teams were integrated into a single proposal that was presented to the IFM committee for approval. Implementation was closely coordinated with the implementation of the Agency Models in the field. Managu rg the process—roles and res pa, ,sibilities. Implementation of Agency Models is essentially a bottom-tip process working directly with each sales agency and involving staff and agents in implementing changes. The key roles and responsibilities for managing the implementation process are: • The project sponsor, who is the senior vice president in charge of the Field and Sales Development division. • Home office line managers. Responsibility for results resides with operational areas, reporting to the sponsor. • General Agents and their management teams. • Two change agents who coordinate the project and report directly to the project sponsor Responsibilities of the change agents include: managing the process (change management), ‘inventing’ and piloting the implementation process, working with all stakeholders, sustaining long-term commitment, administering the program, planning intervention and implementation strategies, working to incorporate changes into standard home office operating procedures. Business/technical partnership. Both the Agency Models and the home office reengineering efforts were driven by business requirements; technology is viewed as the enabler. Technology specialists were actively involved throughout the strategic planning process. They played a key role by helping business managers understand the opportunities that technologies provided to improve business operations. Many of the reengineering recommendations were also supported by technology recommendations.A separate technology model was developed expressly to support the other nine models. Thus, the business requirements were the driver for the technology strategy. Train and support innovative procedures. To support implementation, the company published Agency Models manuals, offered workshops and seminars, and provided other resources to encourage sales agencies to adopt those best practices that could help them improve performance levels. In addition to their regional field offices and other home office resources, the company contracted with a former General Agent and field development vice president as coaches to
  • 3. assist agencies. Sustaining long-ternt commitment. Some of the main strategies used to sustain long-term commitment include: intervention strategies, keeping the vision alive, reinforcing behaviors, strengthening the buy-in of stakeholders, communication with key stakeholders, publishing success stories, coaching, and institutionalizing results. An important focus was on working with the senior field development vice presidents and other important stakeholders to align home office operations with all the changes being implemented in the field. The Agency Models program is an ongoing effort for the long term. Results and Progress This program is viewed as a long-term investment in building production capability. Examples of early progress in agencies included implementation of new programs sU as marketing, improved recruiting systems, restructU and strengthening of frontline management staff, cia’ cation of roles, and improved accountability for resul General Agents have been particularly enthusiast c abc the consulting process, which is the backbone of the’ plementation approach. The i cooperation and frankfl during interviews and the level of commitment and follow through on action plans are indicative of the success of approach. Summary Implementating restructuring projects (major org zational change) is a constant challenge. Whenthe go gets rough, as it inevitably does, there are always sk tics waiting in the wings to insist that new processes not working and the solut on is i to go back to the old iii and true. Critical to success was keeping people focused on vision and creating successes along the way that reinfo needed behavior changes. Managing the impiementat of this restructuring project was a constant balancing a balancing the interests of all major stakeholders, change tivities and operations, training and production time, derly change versus chaos. Implementation of Agency Models is viewed by company more as a process than a destination. Ultimat one of the goals is to create a learning organization tha continue to evolve and reachhigher levels of success. plementation is t not viewed simply as a finite set of tasks be completed by a certain date. The objective was to crea a framework for continuous improvement. For exafflpconsulting teams bring back ideas and success stories can improve upon the original models. General Ag have initiated networking to support each other in imp menting the Models. General Agents were encouraged take a broader view of the general agency distributions tem, seeing their success as ultimately linked to the sur of the entire system. ‘Learning organizations,’ writes Peter Senge in Fifth Discipline (Doubleday Currency, New York, 1990),’ organizations where people continually expand their pacity to create the results they truly desire,where new aii4 expansive patterns of thinking are nurtured, where coll~ tive aspiration is set free, and where people are continUai~ learning how to grow toge ther.’ CASE STUDY QUESTIONS 1. What was the business strategy for this project? How did the business strategy shape the approach to implementation? 2. The project used a best practices approach to implementing change. Do you think this was an appropriate strategy? Why or why not? 3. Why did the company select a consulting model rather than a training model to implement technology and business changes? How important was the buy-in and involvement of all key stake-holders in the implementation process? How important was creating a sharedvision for change? Why? 4. What were the major roles and responsibilities involved in managing the project and the m i plementation process? Who had ultimate responsibility for project results in the home office? In the field? 5. The case does not tell us a lot about the specific technology solutions that were involved in this reengineering effort. It does stress however, that technology was viewed as the enabler for change rather than a driver for change. Based on the information you learned in Chapter 3 about sales force automation, why do you think the company took this aproach? What arc some technology tools that might have been implemented as part of this project?